A DLF spokesperson said that it would be three months from now before they would float an REIT. They would have to file the revised prospectus in a month from now, and then it would take another two months to get approval. Unitech’s plan to float an REIT is also on hold.

Though mutual fund managers are quite upbeat with the idea of REMFs for investors, they are in no hurry to launch a new REMF. The reason being cited is the present volatility in real estate stocks with the majority of them showing steep declines. “The concept of REMFs is definitely a good idea, it is very important for retail investors to invest in different asset classes. However, in the present market conditions we are quite conservative about launching a new REMF, though we are discussing on the merits of such a fund. The real estate funds to be launched by us will be close-ended for a period of 5-10 years,” said Reliance Mutual Fund CEO Vikrant Gugnani.

“Investors will gain with the rise in rentals and appreciation of the property value, and at the same time feel secure as the funds will be managed by experienced people, but we are reluctant to launch an REMF now,” said the CEO of a leading mutual fund. Reason: realty prices have witnessed a correction in many metros, and market arithmetic has changed in the last two months.

Investment in real estate has always been a tricky game. Time and again, there have been talks of a property bubble waiting to burst. The government has shown concern in the past on rising real estate prices, even taking steps to make it difficult for foreign money to chase Indian properties. But nobody is questioning regulator’s guidelines as MF managers feel REMFs would only provide an option to investors to diversify their portfolio.

In its notification issued on April 25, Sebi had said at least 35 per cent of the new assets should be invested directly in real estate while the balance may be invested in securities of companies dealing with real estate.